Hype Has Worth: Attention, Sentiment, and NFT Valuation in Major Ethereum Collections

TL;DR

This paper investigates whether social discourse and attention around major Ethereum NFT collections are informative for pricing once visual heterogeneity and market-wide effects are controlled. It combines a transparent visual index with collection-level Reddit-based attention and sentiment measures in a Mundlak mixed-effects framework, distinguishing between persistent cross-collection differences and within-collection dynamics. The main finding is that persistent collection-level attention and negativity are strongly associated with higher prices, while within-collection effects are mainly driven by negativity and by sustained attention over multiple windows, indicating both slow-moving social context and episodic eventfulness influence valuations. The study contributes a transparent, interpretable approach to linking online discourse to market outcomes in digital cultural goods and highlights the nuanced role of sentiment and attention as priced social information beyond intrinsic artwork attributes.

Abstract

Do online narratives leave a measurable imprint on prices in markets for digital or cultural goods? This paper evaluates how community attention and sentiment relate to valuation in major Ethereum NFT collections after accounting for time effects, market-wide conditions, and persistent visual heterogeneity. Transaction data for large generative collections are merged with Reddit-based discourse measures available for 25 collections, covering 87{,}696 secondary-market sales from January 2021 through March 2025. Visual differences are absorbed by a transparent, within-collection standardized index built from explicit image traits and aggregated via PCA. Discourse is summarized at the collection-by-bin level using discussion intensity and lexicon-based tone measures, with smoothing to reduce noise when text volume is sparse. A mixed-effects specification with a Mundlak within--between decomposition separates persistent cross-collection differences from within-collection fluctuations. Valuations align most strongly with sustained collection-level attention and sentiment environments; within collections, short-horizon negativity is consistently associated with higher prices, and attention is most informative when measured as cumulative engagement over multiple prior windows.